BankingCorporate to Bank RelationshipsTurning Dispute Management to your Advantage

Turning Dispute Management to your Advantage

The card market has become increasingly saturated in recent years as supermarkets and airlines, for example, have started offering credit card services in addition to traditional banks, although most of these are ‘white-label’ deals based on banking partners’ systems. For most corporates this has been beneficial as increased competition has led to card companies constantly competing on interest rates and other terms. However, improvements can still be made, particularly with regard to error and efficiency levels.

For corporate treasurers and finance directors this should be a key consideration. Disputed money can be held in suspense accounts, which could lead to cash-flow, management and potential compliance problems. But as well as this, disputed transactions can often be complicated and take valuable time away from company accounts people while they try to reach a resolution. Card issuers’ customer loyalty and confidence can easily be eroded if the process from initiation through to resolution isn’t dealt with quickly and efficiently. The longer it takes to resolve a dispute, the less the likelihood of the customer using the card issuer. Corporate treasurers and finance directors may think that’s not their problem but the internal reputation of the finance department suffers too when card users face continual problems trying to use the cards selected for them.

What is apparent is that many card issuers are still not applying much thought to understanding how to reduce processing inefficiencies, which in turn leads to high operation costs rather than a better service for customers. Many issuers need to be more vigilant in applying best practices to both their front and back-office dispute functionality.

Choosing a Card Issuer

Many customer interactions are dictated by back-office processes in the bank rather than being dictated by the customers’ needs. This could mean wading through forms or not being able to get basic account information via websites. However, customers are increasingly looking for easy-to-use, around-the-clock access through processes that can cope with multiple points of access seamlessly, whether it is through a local branch, via a call centre or over the web. In many organisations, the only person who sees a process from start to finish is the customer. Banks can often be structured in a siloed, departmental way, with the gaps in between only seen by the customer. Corporate treasurers and finance directors should take note of this when looking for a card issuer. What has the previous experience been? What has it been like trying to get information about cards from the current banks or potential contenders?

One of the major problems is that many issuers have multiple systems, which are not being fully integrated for straight-through processing (STP), nor integrated with core processing systems within the back-office. Today many back-office dispute processes are lagging behind, because there is a heavy reliance on manual intervention. This is supported by a recent best-practice benchmarking study by Red Consulting and Edgar Dunn, which revealed that dispute processes were typically being carried out with very basic automation and too few issuers were performing regular audits of their processes and procedures to assess the efficiency of their operations. Obviously in the long term this could have a detrimental effect on the service delivered to customers.

Where banks have tried to implement STP as part of their business processes to deliver better service to their customer, many have been hampered by the associated manual workload as processes have mainly centred on phone conversations, database enquiries and paper trails. To this end many banks are using automated business process management (BPM) to help deliver STP to corporates. History has demonstrated that when technology is properly applied it does drive efficiency and productivity; a leading US bank recently gained a staggering 48 per cent increase in its resolution rate after automating its dispute process.

Internet Support and Impact

The general acceptance of the Internet as a viable channel for online banking has shifted the responsibility for transactions back to their source, in order to further improve process automation within the confines of the bank. Many banks and card companies are making the dispute process more accessible to the cardholder through web-self service.

Traditionally disputes used to be considered a liability; with some issuers making it harder, not easier, for corporate users to dispute items on their statements. Web self-service is being seen as a way of lowering the dispute hurdle while mitigating risk exposure. Many are now deploying software built around sophisticated rules engines that guide end users through a series of questions and answers to qualify and drive the user to a system-determined reason-code and/or result path. These rules can be extended into the call centre and back office so that customer representatives can take disputes over the phone or the mail room and process them according to the same policies and rules of all the channels.

As many corporate treasurers and finance directors may find, disputes present a challenge to the average call centre. Dispute resolution is a complicated process, in which different cases require different treatments. Without at least three weeks of specialised training, a bank representative isn’t even prepared to ask all of the right questions to ensure that a dispute can be charged back, let alone take the best or most appropriate actions afterward.

When employing T&E cards and p-cards companies are going to encounter disputed transactions, therefore it is important for them to understand how the process is managed by their card issuer. If a card issuer is taking too long to process even the simplest application or dispute, it may be time to consider ‘disputing’ their processes and moving elsewhere. How disputed transactions are processed is a vital element in choosing your T&E and p-card issuer.

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